Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the Oil & Gas sector. The brokerage house expects Oil India to report a 32.3 percent growth quarter-on-quarter (down of 19.9 percent year-on-year) in net profit at Rs 620.8 crore.Sales are expected to increase by 22.5 percent Q-o-Q (down 15.4 percent Y-o-Y) to Rs 2326.6 crore, according to Motilal Oswal.Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 22.2 percent Q-o-Q (down 28.9 percent Y-o-Y) to Rs 771.6 crore.Motilal Oswal's report on Oil IndiaWe expect OINL to report adjusted PAT of RS 6.2b (v/s RS 7.8b in1QFY16 and RS 6.8b in 4QFY16).We estimate EBITDA at RS 7.7b (down 28.9% Y-o-Y and up 22.2%Q-o-Q). We estimate gross and net realization at USD45/bbl, with no subsidy sharing burden.We model upstream subsidy if under-recovery is above government support of RS 12/liter in kerosene and RS 200/kg in LPG.Our Brent price assumption is USD50/55/bbl for FY17/18.Play on crude price: Post the diesel de-regulation, and switching of cess to ad-valorem basis, OINL’s earnings are more closely aligned to crude price than earlier.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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